Falling oil revenues mean Scotland would face a “devastating” £7.6 billion of cuts if it had to raise all the cash it spends, Labour has claimed.
The party’s Scottish deputy leader Kezia Dugdale had previously claimed the country would be some £6.5 billion worse off if there was a change to the way funds are allocated throughout the United Kingdom.
But after the Office for Budget Responsibility (OBR) yesterday revised down the amount of money it predicted North Sea oil revenues would raise, she said the impact was even greater.
Public cash is currently distributed across the UK using the Barnett formula, but the SNP wants Scotland to have full fiscal autonomy – meaning it would have to raise enough in taxes and borrowing to cover all its spending.
Ms Sturgeon told Holyrood the Scottish Government would publish a new bulletin setting out its latest forecasts for oil revenues “as soon as possible”.
But Ms Dugdale said plans for full fiscal autonomy had been based on significantly higher oil prices of 110 US dollars (£74) a barrel.
The Labour MSP challenged Ms Sturgeon on the issue, telling her: “The new OBR figures show something quite extraordinary, they show even the SNP’s most pessimistic scenario for oil and gas revenues are £10 billion more than the OBR’s latest forecast.
“And on the SNP’s preferred scenario the difference is almost £30 billion, that’s nearly the whole Scottish Government budget.”
She added: “Last week I said scrapping Barnett would cost Scotland £6.5 billion in spending cuts. I was wrong. The oil projections from the OBR confirm the costs would now be £7.6 billion.
“That’s a Barnett bombshell, It would mean billions of pounds worth of cuts.”
Ms Dugdale called on the SNP leader to “just do the decent thing and admit the SNP’s plan to scrap Barnett would be devastating for Scotland”.
Ms Sturgeon told her that when the Scottish Government had forecast oil prices of 110 US dollars a barrel, the OBR was predicting 100 US dollars (£67), while the UK Government Department of Energy and Climate Change was “projecting an oil price of upwards of 120 US dollars (£80) a barrel”.
She said: “I think it’s fair to say everybody’s projections about oil were wrong.”